Category Archives for "Finances"


What Justifies a Firm’s Use of Long Term Loans — Advantages and Disadvantages

Wondering what a long term loan is? It is basically a form of debt that you are supposed to pay over an extended time period, but this time frame should extend the duration of one year. A business gets this loan so that they can buy assets, equipments and inventory or to get additional income for the operations. Some of the common examples of long term loans are boat loans, car and auto loans, equity loans, mortgages, personal loans, and student loans.

Coming back to the question, is it ever a bad time to go for long term loans? Well, everything has its own set of advantages and disadvantages, so let’s have a look at them from a business’s perspective:

Advantages of Long Term Loans

If you look at it from the firm’s perspective, long term financing has a number of advantages. They are:

Debt Not Costly

The debt is not at all costly. The reason why it is not costly is that the interest of debt is tax deductible and secondly, a lot of investors consider this to be a less risky investment, since it has a low return rate.


Another advantage is that it provides flexibility in the financial model of the company. This flexibility can be increased with the help of insertion of call provision in the bond structure. It is important to know that in case of over capitalization; the company can make use of the debt so that they can balance the capitalization.

Lack of Interference

Another great advantage is that there is no interference in your business operations, because the bond owners are basically creditors, and they don’t have a right to vote and meddle with your business.

Tax Saving

Your company will get a chance of saving tax on interest on debt.


The budget allows you to buy things that would not have been possible without the long term loan. The debt gives you a chance to work to stay in touch with the lender, so that you can find out how much you can pay back every month in the long term.

Disadvantages of Long-Term Loan

There are certain disadvantages related to long term loans. Let’s have a look at them from the firm’s point of view:


Remember that interest is always a burden because the company has to pay it to the bondholders. The problem is that the company has to pay this amount, irrespective of the fact that whether they are receiving any profits or not.

Maturity Date

Another disadvantage is that long term loans have a fixed maturity, which means that the investor has to reinvest their money once the bond has reached its maturity.


The debt makes this source of financing extremely risky. The company has to pay the interest in the given period of time because non-payment can result in bankruptcy.

In conclusion, you should weigh the advantages and the disadvantages before going for a long term loan.


The Top Credit Card Don’ts

Credit cards can easily seem like the knight in laminated shining armor when you need cash for that one thing you cannot resist buying or the dream vacation that you must go to, plus you are earning big rewards on it, so you are not really splurging irresponsibly, or are you?

Credit cards are great to establish a good credit score by keeping up with your payments and showing off this pattern during your loan borrowing meeting. That being said, owning a credit card is enough to put you at risk of making blunders with the use of it.

Having Too Many of Them

Foregoing the shredder may not be the best decisions, especially if you are sporting too many credit cards. You have to stop and think if you really need a credit card. Essentially, to build a good credit score, you need 3 cards. If you have more than that and you do not really need them then you stand a good chance of being pulled down in debt.

What most people do not know is that having too many credit cards can also impact their credit score negatively, which would ultimately negatively influence their eligibility to be able to borrow loans. Do not make the mistake of dividing your spending between different credit cards, just because you find yourself hitting the limit of one card; chances are you will be tempted to utilize till the limit of the second card as well.

Complex Introductory Rates

It is easy to misunderstand rates. Most people get a new card so that they can transfer the money to a no-interest account. ‘Deferred Interest Rates’ are a type of introductory rate that traps consumers. The deals are usually offered with big purchases like an appliance or a piece of furniture. Remember that when it comes to credit card, interests are stacked from the day of purchase. If you don’t pay off debt during the introductory period, the rate increases.

Matching the Wrong Card to Your Lifestyle

People are usually tempted to ignore the fine print on a card because they are too busy rummaging through details of its other attractions. Choosing between different credit cards is not about which ones get you the best rewards and rebates. If you are carrying a balance that comes with high interest rates, remember that reward points are rarely helpful.

Making Late Payments

Paying your credit card bill late may be better than not paying it at all, but that still has you paying off late fee, and on top of that a bad credit report. You should review your monthly statement, and make sure you prioritize expenditure and the bills you have to pay off, this way you won’t ever be late to pay off the bill. Also, checking your statement vigilantly every month helps you detect a case of identity theft, if there is one.


How Payday Loans Work

Payday loans are an alternative to conventional loans. These loans are suitable for meeting cash shortfall during the end of the month. Unlike traditional loans, payday loans can be obtained by individuals who have a bad credit history. Moreover, they are much easier to obtain as compared to the conventional loans.

Benefits of payday loans include less strict loan requiremnets and fast  approval. However, these loans entail high interest rates. Here we will take a look at how payday loans work, and what are the associated rates and charges.

About Payday Loans

Payday loans are very short term duration loans, typically less than three months. Individuals can apply for payday loans online. In the UK, there is no limit to the rate charged by the lenders. Some of the lenders charge annual percentage rates (APR) as high as 2000%. That said, this figure is meaningless if the loan is availed for 2 months or less.

For instance, a payday loan of £300 that is repayable in 2 months, and has an APR of 2000%, will have the interest rate of £198. However, the longer the repayment period, greater is the interest that you would have to pay on the loan. You can calculate borrowing costs of payday loans by using the online calculator here

How to Apply for Payday Loans?

To apply for a payday loan, an individual will need to provide bank account information and proof of income. Lenders will usually approve the loan within 36 to 48 hours if the individual satisfies their lending requirements. The loan amount is transferred to the bank account of the individuals.

Repayment of Payday Loans

Individuals have two options to repay payday loans. They can either pay back the loan through check, or grant access to the lender to automatically deduct the amount from the bank account once due. The repayment period is specified by the lenders, though some lenders allow you to choose the repayment period.

What’s the Difference between Secured and Unsecured Payday Loans?

Payday loans are not secured in that the payday loan lender does not require you to offer any collateral to obtain the loan. On the other hand secured short term loans, such as logbook loans, are secured against an asset such as your car. The lender will take ownership of the secured asset in the case of default of the loan.

In most cases an unsecured payday loan is a better option than logbook loans. The reason is that the logbook loans are not only expensive but you will also put your valuable asset at risk. These loans are availed by desperate individuals who have very poor credit history.

To sum-up, payday loans are suited for individuals who have to meet cash shortfall until their next pay-check. It’s suggested that you repay the loans at earliest. The reason is that the more you wait to repay the loan, the greater will be the interest charges. Also, it’s best to compare charges and rates of different providers before you take on these loans for meeting essential household expenses.


One Hour Payday Loans – What Are the Possibilities?

One Hour Payday Loans

A one hour payday loan is basically just a specified amount of money that is borrowed to fund your emergency situations and is typically repaid once you get your next paycheck. One hour payday loans are growing to be notably favorite with the passage of time in the lending market place due to their instant availability with ease.

Expenses arise from every corner of the earth and one needs to be prepared, but if you ‘re not, running a little low on cash, then a one hour payday loan can be a wonderful solution to your problem. It can help you face emergencies like a medical crisis, immediate house repair, car breakdown and accidents with ease. You never know when such situations come up and you need to face such requirements.

You can apply for the one hour payday loan at various places. Apply personally to get money from the lender or go to your mall to find the particular loan store.

You can also apply online at The process is safer and much faster online.

One Hour Payday LoanThe best part is that you don’t have to go through complex processes and documentation either. The loan providers offer the borrower the luxury of receiving their loan approval within just a couple minutes. In this case the money is wired directly to your account within an hour.

Payday loan applications

Payday loan applications are very simple, they differ from lender to lender. But typically, you are asked to provide with your basic details like name, age, address, source of income and your local account information. Some might ask you various identifying questions over the phone too for proper verification.

One hour payday loan companies value their ratings a lot and you can easily find any good company which can deliver you the cash faster, by going through the reviews. Sometimes, for urgent delivery the lenders also charge a small fee. Because that it is best to apply for more than one loan company to secure your chances.

For the repaying of the loan, lenders ask you to select a payment option and also recommend a method that best suits them to directly draw money from your account on a set date. It s easy and all you need to do is just provide with a specific date, fund your emergency expense and let the lender take care of it. No hassle of visiting the office again and again.

Who knows there will come a day when you might be faced with a tough decision in an emergency, let a one hour payday loan help you out of a rough situation when the options are limited. No doubt, more and more people are opting for this facility due to the quick and safe service provided.